American Midstream Closes On Eagle Ford Natural Gas Distribution System

American Midstream Partners LP completed acquisition of a 120-mile gas gathering and redelivery system in the oil window of the Eagle Ford Shale from a subsidiary of Penn Virginia Corp.

The acquisition includes a long-term, fee-based gathering agreement whereby Penn Virginia dedicated for 25 years all current and future natural gas production from the areas served by the system. The system is flowing more than 40 MMcf/d between sales volumes and gas lift, with a significant ramp in volumes expected throughout 2014 and thereafter.

Production gathered by the system is compressed and delivered to a third party for processing or redelivered to Penn Virginia for gas lift. Penn Virginia is operating six to seven rigs on the system with nearly 900 remaining drilling locations in the acreage dedicated to American Midstream, and volumes are expected to triple from current operating levels by mid-2015.